Winter is coming: EU to be hit by 60 percent gas price hike – 'No sign of slowing down'

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Winter is coming: EU to be hit by 60 percent gas price hike – 'No sign of slowing down'

Energy bills for UK households to increase by £139Households across Europe face much higher winter energy bills due to a global surge in wholesale

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Energy bills for UK households to increase by £139

Households across Europe face much higher winter energy bills due to a global surge in wholesale power and gas prices and consumer groups have warned the most vulnerable in the region could be hit by fuel poverty as a result. Bloomberg’s Javier Blas warned there is also no sign of the price increases slowing down.

He tweeted: “GAS MARKET: I don’t want to alarm anyone, but European gas prices are up this morning >7 percent to a new all-time high, bringing their increase since August 1 to ~60 percent.

“The rally does not show any sign of slowing down.

“Gas inventories are seasonally very, very low. And the winter is coming.”

Energy companies pay a wholesale price to buy gas and electricity, which they then sell to consumers. As in any market, this can go up or down, driven by supply and demand.

Prices typically rise in response to more demand for heating and people turning lights on earlier in winter, while those in the summer period are usually lower.

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EU news: Gas prices hikes will see a huge spike on energy bills across the bloc (Image: GETTY)

But prices have sky-rocketed due to low gas storage stocks, high European Union carbon prices, low liquefied natural gas tanker deliveries due to higher demand from Asia, less gas supplies from Russia than usual, low renewable output and gas and nuclear maintenance outages.

Benchmark European gas prices at the Dutch TTF hub have risen by more than 250 percent since January, while benchmark German and French power contracts have both doubled.

Some governments have announced measures to try and ease the winter burden on households.

“EU legislation allows member states to apply safeguards, such as public interventions in price setting for supply of electricity to energy-poor or vulnerable household customers, under certain conditions,” a European Commission spokesperson said.

READ MORE: Labour supports nationalisation of energy, water and transport 

spain energy bill gas price hike

Spain passed emergency measures on Tuesday to reduce energy bills (Image: GETTY)

The French government plans to make a one-off 100 euro payment to the 5.8 million households that receive energy vouchers to help ease the cost of rising energy bills, the Prime Minister’s office said on Wednesday.

Prime Minister Jean Castex will announce on Thursday that the affected households will automatically receive the payment in December, it said.

In Spain, the cabinet passed emergency measures on Tuesday to reduce energy bills by redirecting billions of euros in extraordinary profits from energy companies to consumers and capping increases in gas prices.

The government expects to channel some 2.6 billion euros from companies to consumers in the next six months.

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EU news: Nord Stream 2 could help combat gas prices hikes in Europe, says the Kremlin (Image: PA)

Greece will offer subsidies to the majority of its households by the end of the year to make energy costs more affordable, a government official said on Tuesday.

Italy is looking to review the way electricity bills are calculated in an effort to curb prices, two sources said on Tuesday, with retail power prices set to rise by 40 percent in the next quarter.

In Germany, energy prices are being debated in the run-up to the September 26 election.

A rapid start-up of the Nord Stream 2 pipeline from Russia to Germany could help to balance high gas prices in Europe, a Russian Kremlin spokesman said.

eu news germany election gas prices

EU news: In Germany, energy prices are being debated in the run-up to the September 26 election (Image: GETTY)

Gazprom has finished construction, but will not start pumping gas to Europe until approval from a German regulator and commercial deliveries are not expected in the short term.

The pipeline was highly criticised and attempts to oppose it were made across the EU, but Angela Merkel received the backing of the courts to go ahead with the deal.

Britain introduced a price cap on the most widely used energy tariffs in 2019 aimed at ending what former Prime Minister Theresa May called “rip-off” pricing.

However, Britain’s energy regulator Ofgem has raised the cap on the most widely used tariffs by 12-13 percent from October, after raising it in April due to high wholesale costs.

Ofgem says without this cap rise, companies would be unable to continue to supply energy to their customers and fulfil their wider obligations.



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